Effective from the year of assessment 2009, the corporate tax rate is reduced to 25% and the maximum individual tax rate is revised from 28% to 27%. Malaysia also offers a wide range of tax incentives for manufacturing projects under the Promotion of Investments Act 1986 and the Income Tax Act 1967. The main incentives are the Pioneer Status, Investment Tax Allowance, Reinvestment Allowance, Incentives for High Technology Industries and Incentives for Strategic Projects and Incentives for the Setting-up of International/ Regional Service-based Operations.

The direct tax incentives grant partial or total relief from income tax payment for a specified period, while indirect tax incentives are in the form of exemptions from import duty, sales tax and excise duty.

7 Incentives for the Machinery and Equipment Industry7.1 Incentives for the Production of Specialised Machinery and Equipment7.2 Additional Incentives for the Production of Heavy Machinery7.3 Additional Incentives for the Production of Machinery and Equipment